SPX S&P 500 Daily Chart; Overbot; Falling Wedge; Positive Divergence Developing; Lower Band Violation

Here is an update of the SPX daily since it was posted on Friday. Remeber, the idea was to wait for the MACD line to positively diverge before the bottom occurs in this daily time frame. So equities are smacked hard on Friday, there is blood in the streets, bulls are running for their lives, and price drops to that LOD at 2628.16. Write that number down and reference it as time moves along. As price makes the lower low the MACD line...... continues lower, it remains weak and bleak (purple circle). Thus, price likely wants to come back down again for another matching or lower low after it pops a day or few due to the positive divergence (green lines); a jog move, up-down-up.

A satisfactory bottom will not occur until the MACD line goes possie d like the other indicators. Price has violated the lower standard deviation band so a move back to the middle band at 2801, and falling, is on the table. This is also the 20-day MA at 2801.

Price may want to back kiss the important 150 and 200-day MA's that failed at 2767-2776. With the 20-day coming down it will form a confluence with the 2767-2776 range in a a couple days or so. This area may act as a magnet for price. October has been a straight down month and when the trend is strongly in one direction, the last few days of the month tend to trade opposite. So this factor would lean towards a recovery in the S&P 500 to end the month which is Wednesday, Halloween.

A rally may occur out of the gate on Monday but use the MACD line as the guide for whether it is sustainable or not. Nonetheless, she is very close to turning up and creating a relief rally. However, remain alert, because as long as that MACD is negatively sloping its illness may still inflict other indicators.

Note that flat 150-day MA line. This is a key cyclical market indicator. The 150-day MA is flat and may begin curling downwards (slope negatively). This will signal that a cyclical bear market is underway. The SPX below the 12-month MA at 2740 is currently signaling that the stock market is in a cyclical bear market. The NYA below the 40-week MA signals that the stock market is in a cyclical bear market.

Perhaps a bounce early in the week as the month closes out to help claw back some of the drastic drop in October, and then weakness again due to the MACD line, and then when that MACD line goes possie d that is the bottom in this daily time frame, and a substantive relief rally begins that should last a few days and more. The Monday action will tell a lot. This information is for educational and entertainment purposes only. Do not invest based on anything you read or view here. Consult your financial advisor before making any investment decision.